Osborne tightens grip on UK cabinet after Cameron reshuffle

LONDON, May 11 (Reuters) - British finance minister George Osborne has emerged as a winner in a cabinet reshuffle by Prime Minister David Cameron after last week's election, with several close allies moving into top jobs in the new government on Monday.

Osborne, who has been mentioned by Cameron as a potential successor as leader of the Conservative Party, saw four of his former aides brought into the cabinet or promoted, including new business secretary Sajid Javid and energy secretary Amber Rudd.

Another -- Priti Patel, now a minister for work and pensions -- was a junior minister at the Treasury under him.

Osborne himself was made the most senior member of the cabinet by Cameron last week, a reward for overseeing a recovery in Britain's economy that helped the Conservative Party to win an unexpected outright majority.

"It looks like this is a definite strengthening of Osborne's hand by Cameron," said Gidon Cohen, a politics lecturer at Durham University.

But with Cameron promising to stand down as prime minister only at the end of his new five-year term, Osborne's chances of leading the party will remain closely linked to the performance of the economy, he said.

Osborne, 43, is set to help lead negotiations with the European Union about reforms of the bloc before a planned referendum on the country's EU membership.

But he also has to oversee the government's renewed push to bring down Britain's still large budget deficit.

Day-to-day responsibility for cutting spending will fall to Greg Hands, who was named chief secretary to the Treasury.

Hands, a 49 year-old former banker, once served as a private secretary to Osborne. He worked most recently as a government whip, a job which enforces party discipline in parliament.

The previous Treasury secretary was Danny Alexander but his party, the Liberal Democrats, was decimated in the May 7 election and the Conservatives' new majority freed Cameron from having to divide up his top jobs in the new government.

Osborne and Alexander halved the budget deficit between 2010 and 2015 but failed to meet their original target of largely eliminating the shortfall by now. The deficit still stands at nearly 5 percent of annual economic output.

In another promotion for a former Osborne aide, Sajid Javid was named as business secretary. The bus driver's son and former banker will assume the challenge of improving Britain's poor productivity record at the department which supports exporters and promotes skills training and science and research.

Another contender for the Conservative Party leadership, London mayor Boris Johnson, was given a political role in government.

Theresa May, the third senior Conservative on Cameron's list of possible successors, remains as interior minister.

Harriett Baldwin, a former pension fund manager at investment bank JP Morgan, was appointed as Economic Secretary to the Treasury -- the role in the finance ministry responsible for managing relations with London's financial institutions.

Cameron's appointments also suggested he was trying to tackle the Conservatives' image as a club for the wealthy elite.

The Sutton Trust, a think tank which focus on social mobility, said half of Cameron's new cabinet was privately educated, down from 62 percent in his previous cabinet.

(Additional reporting by William James and Kylie MacLellan; Writing by William Schomberg; Editing by Andrew Osborn and Catherine Evans)